Observable and Unobservable Investment Information in Multiple Markets

Yoshikazu Ishinagi and Joonghwa Oh
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Yoshikazu Ishinagi: Department of International Relations, Kobe City University of Foreign Studies, Kobe, Japan
Joonghwa Oh: Faculty of Business Administration, Setsunan University, Osaka, Japan

Economic Analysis Letters, 2024, vol. 3, issue 3, 1-9

Abstract: This study considers the effects of disclosure conditions on firms' investment decisions when facing an identical competitor in multiple markets. Assuming that there are congestion costs between multiple investments to reduce marginal cost for each market, this study focuses on the cases where the disclosure conditions may differ by market. Like previous studies on single Cournot competition, these results show that firms invest more in the observable investment markets than in the unobservable markets under symmetric disclosure conditions. However, firms invest more in the unobservable market if there are asymmetric disclosure conditions.

Keywords: Multimarket contact; cost-reducing investment; congestion cost; disclosure conditions (search for similar items in EconPapers)
Date: 2024
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